HDFC Bank cuts lending rate by 0.05%; interest on all loans to reduce

NEW DELHI: Following SBI, countrys second largest private sector lender HDFC Bank has reduced base rate or the minimum lending rate by 0.05 per cent to 9.30 per cent.

The reduction in base rate will bring down interest rate on all loans.

Based on the quarterly review, the bank decided to lower the base rate said HDFC Bank treasurer Ashish Parthasarthy.

The revised rate, one of the lowest in the industry, became effective on Monday.

HDFC Bank had last reduced its base rate to 9.35 per cent in September this year.

Base rate is the lowest lending rate below which banks do not lend to their customers.

Asked about fixed deposit rate cut, Parthasarthy said, It has been stable for past 3-4 weeks. Lets wait and see.

With regard to credit growth, he said there is some traction in the economy and the bank has generally outperformed the market.

Following the status quo by the Reserve Bank in bi-monthly monetary policy review earlier this month, HDFC Bank is the first large bank to cut base rate.

RBI left repo rate, at which it lends to the system, unchanged at 6.75 per cent. The cash reserve ratio (CRR), or the amount of deposits banks park with RBI, was also retained at 4 per cent.

What “The Big Short” Says About the Real Estate Lending Industry

Whether you catch The Big Short on the big screen or pick up a copy of the Michael Lewis book by the same name, this is a story that hits pretty close to home for the commercial real estate industry.

The Big Short offers a behind-the-curtain peek at one of the worst economic crises in history. In the movie version, a handful of investorseither through incredible insight or complete happenstancestumble into an early prediction of the housing market collapse. They make a big stakes gamble that residential mortgage backed securities (RMBS) backed by subprime loans will crash and burn and end up making billions by shorting the market.

The movie describes boring old banking as mutating into a monstrosity that collapsed the world economy. Given the fact that some markets are still in recovery mode more than eight years later, you cant really argue with the devastating effects from that powerful combination of greed, stupidity, lack of oversight and outright fraud. And there is plenty of blame to go around, with Wall Street, the SEC, subprime lenders and the ratings agencies all playing a role in what Michael Lewis refers to as a massive Ponzi scheme.

As the movie delves into the high stakes gambles investors were making on high-risk and generally opaque financial structures such as RMBS and collateralized debt obligations (CDOs) it is fitting that the story line takes a bit of a side trip from Wall Street to Las Vegas, which ended up as one of the markets worst hit by the resulting crash. Using Selena Gomez and a black jack table in the movie to explain not only CDOs, but also synthetic CDOs to a movie audience in less than 60 seconds was a nice touch. It was almost as good as chef Anthony Bourdain describing how unsold RMBS bonds were repackaged and sold as CDOs in much the same way three-day old fish is disguised in fish stew.

Some might look at The Big Short as a manual on how to beat the odds on Wall Street and get rich quick. But the bigger picture here for commercial real estate is what fall-out is the industry still dealing with, what have been some of the lessons learned and are we doomed to repeat some of the past mistakes?

One of the common mantras that was repeated over and over after the financial crisis and the meltdown in residential mortgage securities is that commercial mortgage backed securities (CMBS) were inadvertently hit by collateral damage and painted with the same brush as residential-backed bonds. That is very true. The collapse in RMBS nearly killed CMBS along with it. And CMBS did not exactly rise above the fray. There was plenty of stupid money and bad commercial real estate loans with incredibly high leverage ratios and weak underlying assets that should have never been made.

It is doubtful that the CMBS market will return to its heyday of issuing upwards of $200 billion per year as it did in 2006 and 2007 anytime soon. The market has rebounded, but it is recalibrating at what may be a new normal of closer to $100 billion in annual issuance. According to the movie, one of the worst financial events in history ultimately resulted in an unprecedented bank bailout, while criminal prosecution and reforms to prevent future abuses were virtually nil. Although that hits pretty close to the mark, it is not entirely true.

The Big Short shined a spotlight on banks and lenders that were selling subprime loans almost as fast as they could write them. They were not holding the loans on their books; rather they were kicking them out quickly to be packaged and resold as RMBS with highly questionable ratings to unsuspecting investors. One change that will hit the CMBS sector in 2016 is that lenders may be required to have some skin in the game and hold a piece of those loans on their books. To some extent, the industry is still waiting for more guidance on how regulators will act on that and what impact the new rules might have on new issuance going forward.

Another notable difference is that there does seem to be more transparency on whats included in loan pools. CMBS B-piece buyers are taking a close look at those loans, and either pricing risk or even pushing back on loan quality by kicking some bad loans out of the pools. In the financial markets, memories tend to be short, but for now at least, there continues to be more caution and prudent decision-making on behalf of lenders and investors.

Enough time has passed to take some of the sting out of watching the economic crash unfold that impacted millions of people. Yes, hindsight is 20-20. Why didnt more people see that disaster comingand rather than profiting from ittry to sound some alarm bells to divert it? But watching the movie was also a reminder that, in some ways, the commercial real estate market might have dodged a bullet.

The government stepped in and propped up the banks by giving them essentially free money and extra time to clean up their balance sheets. You might remember the opportunistic investors circling the banks waiting for commercial REO property to hit the market for cents on the dollar. That did happen, and it was substantial by historical standards. Yet, it was not nearly the wave of commercial property foreclosures that many had anticipated, or dare we say in the spirit of The Big Shorteven hoped for. If that had been the case, it certainly could have been fodder for another Hollywood movie.

Debtors Alert: What to do before debt stacking or snowballing

Lately there has been few articles on methods to eliminate debt by applying methods such as lsquo;debt stacking or lsquo;snowballing. But what debtors are not adviced is the most important factor of what to consider before embarking on this action.

Key is you just dont compile a schedule and record your debt as it is and accept the high interest you are reuired to pay, when you are struggling to meet payments. You first need a solution for this problem, not just accepting your situation with possible high interest…Why?

Because if you are currently struggling to meet your EMIs then how would compiling a schedule to eliminate your debt serve you?

Firstly let me present the 2 concept definitions:

1. Debt Stacking

By taking into account the interest rate and amount of debt, lsquo;debt stacking identifies a way for you to pay off your debts. You begin by making consistent payments on all of your debts. The debt that debt stacking suggests that you pay off first is called your target account.

When you pay off the target account, you roll the amount you were paying toward your next target account. As each debt is paid off, you continue this process. Debt stacking allows you to make the same total monthly payment each month toward all of your debt and works best when you do not accrue any new debts.

You continue this process until you have paid off all of your debts. When you finish paying off your debts, you can apply the amount you were paying towards your debt toward creating wealth and financial independence!

Pros: This method saves you the most money in interest payments.

Cons: It might take a long time to get a high-balance debt crossed off your list. You may feel frustrated after investing so much time and energy towards getting paying down a loan, without feeling the mental victory of crossing it off your list.

2. Snowballing

Youd make the minimum payment on all your loans. Then, youd throw every extra penny towards the debt with the smallest balance, regardless of the fact that – in this particular case – it also has the lowest interest rate.

The idea behind this method is that paying off the loan with the smallest balance will give you the psychological feeling of victory when you cross that loan off your list. That mental win will motivate you to continue saving money and repaying your debts.

Pros: This method gives you a more immediate feeling of victory.

Cons: It costs more. Youll pay more in interest, as compared to the debt stacking method

My advice is as follows:

a. If you are struggling to meet your EMIs first approach your creditors to consolidate and/or restructure your debt so your total exposure ranges from 40-50 per cent of your monthly income and ensure you derive at a total EMI you can afford. Interest is automatically reduced most of the time in this cases with conversions to a new product for your new contract, ie converting a credit card which could range in the region of 30-34 per cent pa to a personal loan of 8 per cent pa so there is one huge saving you benefit from immediately.

b. Once your new contracts are signed, I suggest lsquo;snowballing as the most effective and here are my reasons:

i. You will compile a schedule with the smallest liability in the last far right side column which must include the current balance and each month you complete a payment the reducing balance must reflect.

ii. Once you have completed each EMI every month try to pay extra amounts into that last column and you will find the balance reducing fast.

iii. By applying this method to the smallest outstanding liability, you will eliminate the debt faster but the reward is two-fold because you then reduce liabilities faster instead of starting with the largest liability.

iv. By eliminating the smallest debt each time, you conjur an emotion of excitement, prosperity and determination to continue lsquo;playing the game and you will start feeling good about yourself and your situation again where that emotion will be pure positive energy and when you can achieve this vibration, money will start to flow to you simply because your focus is only on eliminating that debt and continuing to create a funnel for the money to flow to that last column, until all of your debt is eliminated.

Eliminating debt is not just physical action but it mainly requires emotional vibrational action, which debt advisors will not tell you because the focus is purely on the realistic situation.

If you simply take a moment to imagine how you would feel seeing and experiencing those columns disappearing one after the other after a few months, then you will understand just how possible it is to create that emotion of prosperity and financial freedom within and only this emotion will serve you to complete the journey.

Just like you created the debt reality you are now facing, you can empower yourself emotionally to transform that negative situation into positive, by applying this very effective lsquo;snowballing tool because only you have the power to change it!

[Note 1: Theda Muller is a UAE-based author of two books: Embrace Financial Freedom Volume One: 10 Proven Ways To Release Debt And Emotional Fears In Todays Economy, and Volume Two: Releasing Fear And Bouncing Back From A Debt Crisis. She also conducts webinars and workshops on debt recovery.]

[Note 2: The views expressed are the authors own and do not reflect in any way, the views of Emirates 24|7. Readers are advised to carry out their own due diligence before taking any decision.]

CIT Agents $118MM Financing of Wellspring Capital’s Acquisition of AdvoServ

CIT Healthcare Finance served as joint lead arranger, joint bookrunner and administrative agent for a $118 million senior secured credit facility for Wellspring Capital Management, LLC, a leading middle-market private equity firm. The financing supports Wellspring’s acquisition of AdvoServ, a nationally recognized operator of residential group homes and related education programs for the treatment of individuals with acute intellectual and developmental disabilities and severe behavioral challenges. Financing was provided by CIT Bank, NA, the principal bank subsidiary of CIT. Terms of the transaction were not disclosed.

Alexander E. Carles, a Managing Partner of Wellspring, said, “We knew CIT had the deep financial and industry knowledge necessary to successfully arrange a large financing in the healthcare sector. CIT previously served as a Joint Lead Arranger for our strategic investment in Great Lakes Caring, an independent provider of home health and hospice services, so we had great confidence in CIT’s execution abilities. This acquisition further expands our presence in the healthcare sector and will allow us to support AdvoServ as they pursue their strategic objectives.”

Kelly McCrann, Chief Executive Officer of AdvoServ, added, “AdvoServ has 46 years of clinical experience, focused on serving individuals with the most challenging needs with scientifically proven behavioral treatments. We provide a strong value proposition to the states in which we operate, as our services optimize quality of life for individuals and their families. Our acquisition by Wellspring, made possible by the financing provided by CIT, will enable us to provide our much-needed services to additional clients.”

David Gibbs, Managing Director, CIT Healthcare Finance, said, “Increased activity in the behavioral health sector promises to create new opportunities for providers that demonstrate clinical excellence, such as AdvoServ. This transaction brings together Wellspring’s resources and expertise with AdvoServe’s strong position in key markets and diversified network of referral sources.”

William Douglass, Group Head and Managing Director, CIT Healthcare Finance, said, “The rapidly-changing healthcare sector offers strong growth prospects to equity sponsors and companies who join with an experienced financial partner to capture the upside in this market. We are pleased to deepen our relationship with Wellspring and look forward to working with them to continue to build out AdvoServ’s leading behavioral health platform.”

During its 46-year history, AdvoServ has established a strong reputation within the specialist behavioral healthcare sector as a leading operator of residential group homes and related education programs for the treatment of individuals with acute intellectual and developmental disabilities and severe behavioral challenges. AdvoServ is highly regarded for its state-of-the-art behavioral treatment techniques, which use advanced data analysis and highly individualized programs.

Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $3 billion of private equity capital. The firm’s objective is to bring partnership, experience and value creation to each investment. By teaming up with strong management, Wellspring is able to unlock underlying value and pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. The firm functions as a strategic rather than tactical partner, providing management teams with top-line support, MA experience and financial expertise, and access to resources.

Sterling National Bank Establishes Community Development Banking Team

Sterling National Bank announced that Vincent (Vince) Maine has joined the Bank as Senior Managing Director to lead its newly-established Community Development Banking team. The new team expands the Banks Community Reinvestment Act (CRA) initiative and will be dedicated to offering commercial finance and consumer credit products that advance the goals of development and reinvestment in the communities in which the Bank operates. The team will serve the New York Metro region originating loans for purposes such as affordable housing, community development, home improvement/home equity lines of credit, residential mortgages and small business lending.

Maine brings nearly 20 years of community development and lending experience to Sterling. He previously held senior CRA positions at PNC Bank, Sun National Bank and Key Bank.

Our new Community Development Banking team will focus on expanding financial solutions for some of the most vital needs of our communities — such as affordable housing, home and neighborhood improvement, and small business lending, said Michael Bizenov, President of Consumer Banking at Sterling. We are pleased to welcome Vince to lead the enhancement of our efforts. He brings tremendous community banking expertise and a dedication to revitalizing communities.

I am excited to be a part of Sterlings commitment to the financial needs of the community. I have always believed that banking institutions can play an important role in investing both financial resources and business expertise to help communities realize their potential and improve their citizens lives, noted Maine.

The Community Development Banking team will work closely with Sterlings CRA Management Committee and will pursue relationships with community-based organizations to identify opportunities and to provide support for projects and initiatives that meet well-defined community objectives as well as the Banks credit standards.

Sterling National Bank, the principal subsidiary of Sterling Bancorp, specializes in the delivery of service and solutions to business owners, their families, and consumers in communities within the greater New York City area through teams of dedicated and experienced relationship managers. Sterling National Bank offers a complete line of commercial, business, and consumer banking products and services.

This parent trap involves $71 billion of federal education debt

In August and October, the department denied Freedom of Information Act requests by Bloomberg News seeking parent default and deferment numbers by college, saying it has yet to complete its analysis by institution. The agency provides default data annually, broken out by school, for most student borrowers. Those rates help determine which schools can continue to access the loan program.

We cant fix problems in the student-loan programs if researchers, policymakers and consumers dont have access to the information they need, Sen. Elizabeth Warren, a Massachusetts Democrat, said in an emailed response to questions.

Sen. Lamar Alexander, the Tennessee Republican who chairs the Senate Health, Education, Labor and Pensions Committee, plans to look at ways to improve the disclosure of loan information in forthcoming legislation, according to a spokeswoman.

Denise Horn, an Education Department spokeswoman, said the government is committed to keeping college accessible and affordable, while helping families make informed choices about borrowing, including parent loans.

As part of those efforts, the department offers loan counseling to all PLUS loan applicants to empower parents with additional details on their loans, Horn said in an email. We believe this is an important component to ensuring borrowers are aware of and understand their repayment obligations.

Maria Correa, a 63-year-old secretary and breast-cancer survivor, is one of those parents being crushed by debt. Correa, who moved to Chicago from Manila in 1982, began borrowing from the government in 2009 to help send her daughter to DePaul University, a private college in Chicago. She took out $120,000 in parent PLUS loans over four years, in addition to the $27,000 her daughter borrowed from the government.

Parents like Correa can borrow the entire cost of a childs college education — in some cases more than $50,000 a year — without having to provide income data. The government requires only that they dont have adverse credit for two years, a duration reduced from five years by the Education Department last year. Applicants can have loan balances of $2,100 that are delinquent 90 days or more, are in collection or charged off and still qualify for a PLUS loan.

It was so easy to get the loan, Correa said over lunch at a Macys store in downtown Chicago, near the office where she has worked for the past 27 years. I tried my best to help out with my daughters needs.

Correas family budget spiraled down, she said, after her husband, Marc, now 68, suffered a stroke in 2010 that left him paralyzed on his right side and permanently disabled. He previously was employed by a restaurant group at Chicagos OHare Airport repairing equipment. Now his Social Security checks mostly go to pay for medication, Correa said.

Correa deferred repayment while her daughter was in college, as a law passed by Congress in 2008 allowed her to do. Now shes in the second year of a maximum three-year hardship deferment. Meanwhile interest has been accruing on her 7.9 percent loans, swelling her debt to almost $170,000.

Every day its on my mind, said Correa, who lost her house in 2012 because she couldnt afford the monthly mortgage payments of more than $2,000. How am I going to pay it?

Correa, who moved with her husband to their daughters home in Bolingbrook, a Chicago suburb, said she plans to use the third year of her hardship deferral and then enter a 25-year repayment plan that will lower her monthly bill to about $1,500 based on her current balance, instead of $2,000. If she makes every payment, she would be at least 90 when the debt is paid off.

I dont know if I will default, said Correa. I dont know when Ill retire.

Correas daughter, who requested that her first name not be used, majored in journalism and public relations at DePaul, graduating in 2013. She works for a nonprofit organization in Chicago and said she pays about $400 a month on her loan.

DePaul, the largest Catholic university in the United States, cautions parents and students to borrow only what is prudent, Jon Boeckenstedt, associate vice president of enrollment and marketing, said in an email.

We cannot control how much a parent borrows on a PLUS loan for an undergraduate, he said.

Parents can borrow to cover tuition, room, board and books, minus grants or loans the student receives. PLUS loans also carry an origination fee of 4.3 percent. The current interest rate is 6.8 percent, and it was almost 8 percent from July 2006 to June 2013.

When money comes from the government, a trusted source, parents do have good reason to borrow, said Merrill, the Harvard lecturer. But the problem is their income is not going to change based on their kids education.

Parents arent eligible for most programs that offer reduced payments for struggling student borrowers based on income.

D-BOX Technologies Announces Closing of $5 Million Private Placement

LONGUEUIL, QUBEC–(Marketwired – Dec. 18, 2015) –

THIS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

D-BOX Technologies Inc. (TSX:DBO), a leader in innovative motion technology, announced today that it has completed a non-brokered private placement with Gold-Finance (Canada) Asset Management Limited by issuing 11,111,111 units at a price of $0.45 per unit, for gross proceeds to D-BOX of $5.0 million. Each of the units is comprised of one Class A common share and three-quarters of a Class A share purchase warrant. Each full warrant will entitle its holder to acquire one additional Class A common share of D-BOX at a price of $0.60 until June 18, 2017. D-BOX will use the proceeds from the private placement for general corporate and working capital purposes.

We are very pleased that Gold Finance has joined the ranks of D-BOX investors, said Claude Mc Master, President and Chief Executive Officer of D-BOX Technologies. Over-and above this strategic investment, we are very proud to welcome our first high-profile Chinese investor to support the deployment of our motion technology. This investment is designed to enable us to accelerate our growth and strengthen our presence in new markets. China is the worlds fastest growing market for entertainment and considering the inroads we have achieved so far we believe the time is right to accelerate our business development efforts. Gold Finances business network and extensive knowledge of the Chinese market will be a major asset for D-BOX to expand aggressively in this growing market, Mr. Mc Master added.

Under applicable securities legislation and the policies of the Toronto Stock Exchange, the securities issued in the private placement are subject to a four-month hold period, expiring on April 19, 2016.

ABOUT GOLD FINANCE

The Gold Finance Group was founded in 2008 as an investment holding group, with its main activity in the financial industry. It is the first Chinese wealth management organization to obtain licenses for Private Fund Manager Qualification, Wealth Management and Fund Sales Qualification in China at the same time.

By the end of June 2015, Gold Finance Group had already set up 50 branches, nationally and internationally, providing tens of thousands of high net-worth individuals and professionals with a large number of comprehensive financial services. Gold Finance has built close and stable mutual cooperation relationships with Chinas top financial investment institutions, economic-advanced regional governments and wealthy families.

In addition, Gold Finance has earned a reputation in the past few years in Chinas movie industry as an investor and producer. Gold Finance has established solid relationships with theatres and top movie stars. Gold Finances resources in the movie industry put it in a unique position to develop both home-theater and commercial-theater business for D-BOX. Gold Finance has also established an office in Canada to further its international strategy in the entertainment and other sectors.

ABOUT D-BOX

D-BOX Technologies Inc. designs, manufactures and commercializes cutting-edge motion systems intended for the entertainment and industrial markets. This unique and patented technology uses motion effects specifically programmed for each visual content which are sent to a motion system integrated into either a platform, a seat or any other product. The resulting motion is perfectly synchronized with the on-screen action, thus creating an unparalleled realistic immersive experience. D-BOX, D-BOX Motion Code, LIVE THE ACTION, MOTION ARCHITECTS and MOVE THE WORLD are trademarks of D-BOX Technologies Inc. Other names are for informational purposes only and may be trademarks of their respective owners.

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements with respect to D-Box and its operations, strategy, financial performance and condition. These statements generally can be identified by use of forward-looking words such as may, will, expect, estimate, anticipate, intends, believe or continue or the negative thereof or similar variations. The actual results and performance of D-Box could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Some important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulation and the factors described under Risk Factors in the annual information form of D-Box dated June 18, 2015. The cautionary statements qualify all forward-looking statements attributable to D-Box and persons acting on its behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release and D-Box has no obligation to update such statements.

Verdachten SNS Property Finance ook in Spanje verdacht van fraude

Dat meldt Het Financieele Dagblad maandag op basis van Spaanse rechtbankdocumenten. SNS Property Finance is inmiddels van SNS Reaal afgesplitst en verder gegaan onder de naam Propertize.

Het strafrechtelijke onderzoek draait volgens de krant om medewerkers die in Nederland al worden verdacht van omkoping. 

In het onderzoek worden Hans A. en Pieter G. als verdachten genoemd. Ook de rol van drie Spanjaarden wordt onderzocht. De vijf waren bestuurders bij het Spaanse vastgoedbedrijf PDU, een dochterbedrijf van Propertize.

In 2011 werd tijdens een bestuursvergadering besloten om aangifte te doen tegen de Libanese projectontwikkelaar Jaafar Jalabi. Volgens de bestuurders probeerde hij PDU 7 miljoen euro afhandig te maken, na een mislukt bouwproject in Valencia.

Onschuldig

Maar een Spaanse rechter oordeelde dat Jalabi onschuldig is en dat de aanklacht van PDU vals is. Een andere rechter stelde dat het vijftal dit had gedaan om een schuld aan Jalabi niet te hoeven voldoen.

Propertize heeft zich bij de Spaanse uitspraken neergelegd en heeft Jalabi alsnog 7 miljoen euro betaald.

Jalabi heeft zelf ook nog een strafklacht ingediend tegen onder meer G. en A.. Hij eist een schadevergoeding van 12 miljoen euro.

SNS Property Finance

A. en G. waren eerder betrokken bij het saneren van de probleemportefeuille van de voormalige vastgoedbank SNS Property Finance. 

G. is een van de twee hoofdverdachten in de Nederlandse zaak. A. heeft vanwege de verdenkingen een schikking getroffen.

De andere hoofdverdachte in de Nederlandse zaak is de voormalige interim-directeur Buck Groenhof van SNS Property Finance. Groenhof was aanwezig bij de vergadering waarbij werd besloten om ook namens hem een aanklacht in te dienen tegen Jalabi.